Local India cold rolled coil (CRC) prices have hit another new peak during the past week, gaining INR 1,000/mt ($14/mt) to INR 54,300-55,000/mt ($734-743/mt) ex-works, amid a high volume of trading activity and reports that standalone re-rolling mills have been hit by minimal stocks of hot rolled coil (HRC), SteelOrbis learned on Monday, November 30.
The price surge and rise in traded volumes in the market was also supported by expectations that producers would be increasing base prices for December deliveries by at least INR 1,500/mt ($20/mt), leveraging the shortage in HRC availability for re-rolling.
Key end-use industries like automobile and consumer durables which reported high sales growth during the festival months of October and November have been bullish about demand growth being sustained and hence have been active in restocking raw materials, enabling CRC prices to touch a new all-time high, sources said.
“The tight supplies of HRC available for re-rolling mills will continue in the medium term as integrated steel mills are already operating at maximum capacities. Re-rolling mills are seeking extensions of delivery commitments with their contracted buyers among automobile manufacturers. I see CRC prices continuing on a further uptrend with minimal downside risks of a correction,” a steel sector analyst with a Mumbai-based financial advisory service firm said.
“Anecdotal evidence from western region-based re-rolling mills indicate that most are carrying HRC inventory, a key raw material, equivalent to less than 10 days’ consumption. Most are having to cut down their booking volumes as premiums are rising,” he added.
$1 = INR 74.00